Fifth-largest mall landlord in the US gives up on shopping centres
Price index of US retail properties drops 18% amid e-commerce, lockdowns
July 15, 2021 | The Business Times
Starwood Capital Group owned 30 malls before the Covid-19 pandemic. It is now down to eight. As values for retail properties plunge, Barry Sternlicht’s investment firm has been selling shopping centres across the US at money-losing prices. Its remaining malls are being managed by outside companies that potentially will seek new owners. In essence, Starwood has decided it is time to stop pouring good money after bad.
“With further deterioration caused by Covid, committing substantially more capital required to successfully reposition many of our assets became unviable at our existing cost basis,” Mark Deason, a Starwood managing director, said in an e-mail.
The dispositions – among the biggest US commercial-property liquidations since the pandemic hammered the economy last year – mark the end of a nearly decade-long bet that made Starwood the country’s fifth-largest mall landlord. Owners of gallerias and shopping centres across America are confronting a similar dilemma as they triage their ailing real estate, often finding themselves holding properties worth less than their debt.
